Date: Wednesday, December 2, 2020
Source: Splash 247
Global supply chains have been rocked in the last couple of months by the acute shortage of available empty containers, giving exporters severe headaches in getting their products to market. However, new research shows a clear kink in the box supply chain – empty containers are spending 45 days on average in depot – and in China, the average time each box is sitting useless is above two months.
German firms FraunhoferCML and Container xChange have partnered to carry out research into the average time containers spend between being empty in depot and empty dispatched, the results of which make clear the need to speed up the process to alleviate logistics bottlenecks.
Container availability across China is still at a record low, while US ports are overwhelmed by a surge of shipping containers from Asia, full of products retailers are eager to get on shelves for the holidays.
In regions with low container availability such as China and the US, the average time empty boxes are hanging around in depots is higher, at 61 and 66 days respectively.
“The skewed geographical development of the demand recovery means a rapidly escalating equipment imbalance issue, which becomes especially acute for North America and Asia,” analysts at Sea-Intelligence noted in a recent weekly report:
“It is – relatively speaking – easy to adjust capacity when demand changes, but it is not possible to rapidly shift empty container across the world,” Sea-Intelligence observed.
This also means that the bottleneck issues currently seen in many locations will take time to resolve with rival analyst Alphaliner predicting the issue would remain until Chinese new year in February.
Commenting on the empty box situation, Andy Lane from Singapore’s CTI Consultancy told Splash: “Detention costs need to be fully levied, even increased, to incentivise faster collection of imports and returns of empties. Where containers are not triangulated and loaded with export cargo, there is no need in North America or Europe to go to a depot, straight to the port only and immediate evacuation. This is what the lines will be doing in their flow management centers.”
“Still-peaking volumes of ocean freight from China to the US continue to cause congestion and delays at US ports. There are reports of ships ‘vessel bunching’ just off the West Coast, waiting for a slot to open at LA-Long Beach, and unload merchandise retailers are eager to get on virtual shelves before the holidays,” online container booking platform Freigtos noted in a report to clients yesterday, adding: “The surge is leading not only to an increase in rolled containers, but also to the severe shortage of empty containers available back in Asian origin ports.”